Browsing by Author "Wormald, Michael"

Now showing 1 - 6 of 6
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    An analysis of the perceived effectiveness of remuneration committees in deciding on executive compensation in South African listed companies
    (2009) Penkin, Kenneth David; Wormald, Michael; Cramer, Peter
    This thesis will examine the administration of executive compensation in listed companies in South Africa in order to understand the background to the topical emotion expressed by the public about the quantum of executive earnings. The Thesis attempts to explain how approaches are made to these vast payments. It commences with the history of the management of executive compensation. Before the 1990s, disclosure of directors' emoluments was limited to one amount. Companies suffered losses due to the Agency Theory where executives dominated boards. With the introduction of remuneration committees and corporate governance, control was moved to a committee of the board of -non-executive directors (a remuneration committee). The purpose of this research was to ascertain whether such a committee is effective. Interviews were held with leading executives and an analyst. An electronic survey was dispatched to the chief executive officers and chief financial officers of a large selection of listed companies. The results of the research are summarised and conclusions expressed on all such views with the addition of limited input of the author's views. The question requires an examination of the effectiveness of remuneration committees. Some suggestions are also made as to future research and actions which may be conducted. This thesis shows that remuneration committees are not as effective as they should be and will explain why this is so.
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    The determinants of capital structure : a study of industrial firms listed on the JSE
    (2009) Luscombe, Leshane; Wormald, Michael
    This study intends to offer further insight into the determinants of capital structure of industrial firms listed on the Johannesburg Stock Exchange. The amount of debt in a firm is an indication of leverage and this study uses various different ratios as a proxy for capital structure. Using multiple regressions, the study sets out to establish whether a relationship exists between a selection of determinants and the capital structure of a firm. The study considers previous research and seminal theories such as the Modigliani-Miller theorem, the trade-off theory, the agency theory and the pecking order theory. The determinants used in this study (and their respective measures) are; the firm's business risk (standard deviation of sales), size (natural log of sales), asset composition (fixed assets/total assets), profitability (earnings before interest and tax/total assets), growth opportunities (market value of equity/book value of equity) and age of the firm (years since incorporation). The study also considers the differentiation between long and short-term debt in identifying the determinants of capital structure. The sample constitutes seventy-one listed industrial firms, for each year, during the period from 2001 to 2005. Using cross-sectional multiple regression, the study attempts to establish whether relationships change over time. Comparing the coefficient of determination of the models over the five years, no significant trend was noted. Overall however, there did appear to be a general decline in the coefficient of determination from 2001 to 2002, and increases in 2003 and 2005. The decline in 2002 could potentially be related to the global market downturn and devaluation of the Rand during this period. In the multiple regression tests done on the pooled sample, there was found to be a positive correlation between both business risk and tangibility, with total and long-term debt, and a negative correlation with short-term debt. It is suggested that riskier firms are dissuaded from issuing shares at their low market prices, therefore prefer debt, and firms with more tangible assets have more to offer as means of collateral. The size and age of the firm were found to have a negative correlation with total and long-term debt, and firm size a positive correlation with short-term debt. Across all leverage ratios, there was evidence of a significant negative correlation with profitability. The findings of the latter three determinants; firm size, age and profitability, are consistent with the pecking order theory. This theory suggests that firms prefer to use their accumulated income before taking on more debt or issuing equity. The findings of this study were found to be consistent with past empirical research.
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    Dividend yields, business conditions, and expected security returns : a South African perspective
    (2003) Kennedy-Good, Jonathan; Wormald, Michael; Roeleveld, Jennifer
    The analysis of this topic has continued to draw attention from academics such as Jensen Johnson and Mercer (1996), Patelis (1997) and Booth and Booth (2001) who examine the results of Fama et al. (1988) under differing monetary policy regimes. Jensen et al. (1996) posit that monetary stringency affects investors' required rate of return, which is consistent with Fama et al.'s (1989) arguments that predictable variation in returns reflects rational variation in required returns. Patelis (1997) finds that monetary variables used in his analysis are marginally significant predictors of security returns across different time horizons, while Booth et al. (2001) find that measures of the stance of monetary policy contain significant explanatory information that may be used to forecast expected stock and bond returns.
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    An empirical study on the determinants of net investment flows of South African General Equity unit trusts
    (2004) Rudman, Riaan J; Wormald, Michael
    Includes bibliographical references (leaves 82-88).
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    An exploratory investigation of the approaches to learning of accounting students studying toward a professionally accredited post-graduate programme at the University of Cape Town
    (2013) Anthony, James; Wormald, Michael
    Increased emphasis by professional bodies on fostering life-long learning has resulted in interest in student approaches to learning. The aim of this paper is to provide a preliminary investigation into the approaches to learning of accounting students in the context of a South African university by sampling students studying a professionally accredited post-graduate programme. A further aim is to investigate the potential differences in these approaches to learning between each of the four core subjects of this post-graduate programme, as well as differences between male and female students, and students achieving differing academic grades. The intention is to serve as a basis for further research within this context as well as provide insights for accounting educators into both student approaches to learning, and links to the learning environment. The Approaches to Study Skills Inventory for Students (ASSIST) was administered to a group of volunteer students all studying the Post-Graduate Diploma in Accounting (PGDA) at the University of Cape Town (UCT). The applicability of the ASSIST survey was tested via confirmatory factor analysis and thereafter the data was analysed to measure the general tendencies of students to favour either a Deep, Surface or Strategic approach to learning. The findings of this study indicate the ASSIST survey is applicable within the context administered although inconsistencies in student responses for one of the four subjects warrants further research. In analysing the data, UCT PGDA students were found to favour a Strategic approach to study, which could be partially attributed to intensive workloads as well as pressure to pass final examinations – passing these exams would grant them eligibility to sit the first of two professional examinations. Generally, no statistically significant differences between student approaches to learning for each of the four core subjects could be observed, nor between student approaches to learning for each gender. However, academically stronger students were found to have less fear of failure; a greater achieving tendency, as well as feeling more comfortable in managing their time. The use of the ASSIST survey in this context is acceptable and initial indications suggest that UCT PGDA students feel discouraged from using a surface approach to learning – a step toward fostering competence in life-long learning.
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    The impact of fund size on the risk adjusted performance of South African unit trust funds
    (2003) Hibbert, Warren T; Wormald, Michael; Uliana, Enrico
    The primary objective of this study is to investigate the relationship between the sizes of South African unit trust funds, as measured by the market value of assets under management, and their respective risk adjusted returns. The study also seeks to determine the degree to which an identifiable range of asset sizes exists within which the risk adjusted fund returns are maximised. The results of the regression and ranking analysis, performed on a sample of South African unit trust funds over a ten year period, revealed that no statistically significant evidence was found to suggest that a relationship exists between fund size and total or risk adjusted return.